Cruises Go Beyond the Sea
March 06, 2008
The cruise industry is getting bigger every year—and so is the number of choices available to planners and winners
By Harriet Edleson
When Charlie Nelson, senior vice president of Great West Retirement Services, a division of Great West Life and Annuity, Denver, plans a cruise incentive, he typically charters a Seabourn ship for 200 employees. "You can give your people a five percent to seven percent pay raise one time, or you can provide a nice incentive, a reward, to attract and retain the talent we want to have on our team," he says. A key attraction is the ability to create a unique experience for outstanding employees.
"We can customize everything from the menu to the ports of call," says Nelson. "Everything is custom, down to the daily program that is slipped under the cabin door. We even name the drinks to make it a really personalized, custom event. [Beyond that] you can define which shore excursions you're going to allow the group to use."
An incentive that builds camaraderie and corporate loyalty is worth a lot to Great West Retirement Services, which spends between $400,000 and $600,000 per cruise annually to inspire and reward its employees.
"It's predominantly work for our people," says Nelson. "It's not a vacation. It's really a business meeting in a really good location." With that in mind, Nelson has planned, down to the smallest detail, a five-night Mediterranean cruise for 200 people for late May or early June. "It's a significant expenditure," says Nelson, noting that 75 percent of the employees travel with a spouse or guest as well.
Nelson chose Portofino—a favorite with Great West employees—as one of the Italian ports of call for the itinerary that includes Monte Carlo (Monaco), Livorno and Rome. The incentive includes a black-tie evening, a deck barbecue night, all shore excursions as well as some free time built into the program.
It's hard to find precise numbers for incentive cruises, but the overall group cruise business accounts for 20 to 25 percent of the U.S. market, says Jo Kling, president of Landry & Kling Cruise Event Services, a longtime leader in the incentive cruise business. She adds that the incentive portion varies widely depending on how aggressively individual cruise lines pursue the business. Windstar Cruises, for example, projects at least 25 percent of its business in 2008 will be incentive trips, according to Donna Kurtz, its manager of charter and incentive sales. "Our incentive business is growing," she says. "Since 9/11 there was a lull, but our business has picked up."
Incentive cruises vary in price depending on the cruise line, number of days, number of participants, destination, program and season. At the high end, they can cost as much as "a million-plus for four days," according to David A. Nelson, vice president, travel, meetings and incentives, Aflac, the Columbus, Ga.–based health insurer. He has used the high-end Silversea and Royal Caribbean.
Whatever the price tag, the industry believes companies get their money's worth. "A cruise provides a 'self-contained' experience—the shipboard life with twenty-four-hour, seven-day-a-week care and pampering, plus an exciting itinerary of new places, depending on the cruise selected," says Terry L. Dale, CEO and president of Cruise Lines International Association (CLIA), which represents more than 20 cruise lines. "Planners can make all arrangements and pay for a shipboard event simply by working with the cruise line's group sales department. Planners can even make arrangements for onshore activities and special events through the cruise line," says Dale, who is based in New York.
 Cruise options range from the mega-cruise ships to smaller vessels to yachts for 50 or fewer people. Meeting space can range from 4,000 square feet accommodating 500 people to exclusive boardroom meetings hosting 10 people, says Dale.
Itineraries include Europe, the Caribbean and Alaska as well as farther-flung destinations like Hawaii and Tahiti. The choice for an incentive depends on the company's budget, employees' previous travel experiences and personal preferences. Ports of call and range of shore excursions, on board facilities and entertainment vary.
Windstar provides a smaller, motorized sailing vessel experience utilizing three ships: the Wind Star, and Wind Spirit, each with a capacity of 148 passengers, and the Wind Surf, which can carry 312 passengers. Each Windstar ship is positioned as a "private retreat," where each traveler's favorite music can be accessed through his or her personal iPod, and where a low draft allows ships to enter smaller island ports such as Virgin Gorda in the British Virgin Islands, Nevis in the French West Indies and Pigeon Island in St. Lucia.
For 2008, Costa Rica, sandwiched between Nicaragua and Panama in Central America, is its number-one choice for incentives. "The airlift is easy, and it's exotic enough to be a good incentive," she says. "It's a little bit less well-traveled and [it is] eco-friendly, and that has a lot of appeal."
Incentive buyers are well-educated about the product, so one of their chief concerns is budget—what's included and what's value-added. Shore excursions are included in the package price 50 percent of the time. If the company charters the whole vessel, it can tailor the itinerary to its needs and preferences.
"Cruises are popular because they are inclusive," says Nikki Nestor, president of World Class Travel by Invitation, a Carlsbad, Calif.–based incentive, meeting and online services company. "Everybody understands that you're going to a destination that's not on the beaten path. You're the only ship on that [Pacific] coast [of Costa Rica]. People want to go to new places."
 For example, Nestor has planned a March 2008 incentive Costa Rica cruise on the Wind Star for 50 employees of Guaranty Income Life Insurance Co., Baton Rouge, La. The seven-night itinerary stops in six ports of call along Costa Rica's Pacific Coast. The cost is considerably lower than for a Mediterranean itinerary. "It's value-priced, but it doesn't diminish the luxury." The price, including air, met the company's budget of $150,000.
Another line, Bora Bora Cruises, based in Tahiti, is a high-end, specialized incentive cruise provider with just 25 cabins that visits four ports of call in a six-night itinerary. The yacht has a shallow draft that allows it to "hug" the islands, says JoAnn Kurtz-Ahlers, president of Kurtz-Ahlers & Associates, LLC, a San Juan Capistrano, Calif.–based sales, marketing and consulting company that represents the yacht. "It's built to go into the nooks and crannies of the islands so you can see the wildlife," she says. "You're getting to see Tahiti in a way a lot of people don't get to see it."
Cruising with Bora Bora is an active experience that includes excursions for sea kayaking, horseback riding and wandering seaside villages. The yacht can be chartered for three, four, five or six nights. "When someone takes the yacht over, they can change the itinerary," says Kurtz-Ahlers. The price tag is not inexpensive, but the exotic nature of the yacht and the itinerary convinces some to spend approximately $9,000 per person plus air for the six-night incentive cruise.
 Among cruise lines with mega-ships in their fleets, Princess Cruises, which has vessels ranging in capacity from 670 passengers (Pacific Princess and Tahitian Princess) to 3,100 passengers, lists its popular itineraries for incentives as seven-day Caribbean cruises, the Mexican Riviera, and Alaska cruises, according to a Princess spokesperson. The most popular U.S. ports for incentive groups are Fort Lauderdale and Los Angeles. The cost of an incentive cruise varies depending on the itinerary and the sailing date. For a March 2008 sailing aboard the Golden Princess, cabins range from $769 to $1,129 per person for inside and balcony cabins.
As the cruise industry continues to grow to a projected 12.5 million passengers worldwide in 2007, from 12 million in 2006, and 11.2 million in 2005, according to CLIA, cruise lines have enhanced the product as they add new ships to their lines. New features range from bowling alleys and sushi bars to spa elements incorporated into the design of staterooms. The Carnival Splendor features a sushi bar and a sliding sky dome as well as a video game room, while the Celebrity Solstice incorporates spa-style jetted showers and relaxing aromas into its staterooms. Norwegian Cruise Line is the first to build a bowling alley on two of its ships. The Norwegian Gem incorporates a four-lane mood-lit bowling alley into its design; there is also one on NCL's Pearl, the first in the industry.
Sidebar: Euro Rising
The rising euro ($1.47 to 1 euro, at this writing) is proving to be a boon to European cruise bookings. By paying in U.S. dollars, companies avoid dealing with the unfavorable exchange rate and being socked with the added expense of paying for European hotels and restaurants in euros.
When companies book in U.S. dollars, they are able to take advantage of the all-inclusive price of the cruise that includes accommodations, meals and, on luxury lines, an open bar.
"A planner can book a European cruise today for 2010 and lock in the current prevailing rates in U.S. dollars and not be subject to the fluctuation of the euro," says Ramon Santos, vice president, business development, Landry & Kling Cruise Event Services, based in Coral Gables, Fla.
However, he notes that for incentives, all-inclusive resorts are "certainly good competition in the Caribbean but not in Europe," where the properties used for incentives are typically not all-inclusive. Consequently, European restaurant costs would have to be paid in euros.
 Sidebar: Celebrit Cruises Offers Cetificates
By Alex palmer
Cruises, with their variety of options all in one place, serve well as individual incentive awards if an employee is either unable to make the group trip, or would find a trip with just his or her spouse more motivating. With this in mind, Celebrity Cruises recently began offering its new Individual Incentive Travel Gift Certificates.
With six certificate levels, ranging from the First Rate (for three- to four-night sailings) to the Ultra Class Certificate (for up to seven nights in ocean- view or veranda staterooms on Celebrity's Solstice, Millennium or Century), the awards are also ideal for a tiered program.
Adding to this flexibility, the certificates can be purchased long before they are awarded, making budgeting and awarding them easier for planners. The certificates allow planners or individuals to pay for a room upgrade, for additional amenities, or to allow for a third or fourth guest if they want to bring the kids.
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